As well as the direct contribution to the Tasmanian economy through employment, the mining industry contributes through taxes and charges paid to the Tasmanian Government, local governments and other authorities. Payments are also made for other services (for example, electricity, freight) and goods.

Many businesses serve and supply the mining industry. For example, companies within Tasmania design, construct and distribute underground mine machinery; and provide specialist mine equipment to Tasmanian mines. Environmental consultants and managers also service the industry. The Tasmanian Minerals Council reports that most mines deal with between 300 and 500 suppliers. Payments on goods and services in Tasmania in 2002-03 totalled $499m.

The value of mining sales or shipments (f.o.b.) for 2002-03 was $1,237m, a decrease of 1.8% on the 2001-02 figure of $1,260m.

VALUE OF MINING INDUSTRY, Tasmania(a)

2001-02

2002-03

$m

$m

Total spent on goods and services

686

712

Spending on goods and services in Tasmania

503

499

Amount spent on capital expenditure

112

101

Number of suppliers dealt with in Tasmania

563

543

FOB value of sales and shipments (b)

1,260

1,237

(a) Approximation only.(b) The value of goods measured on a free on board (f.o.b.) basis includes all production and other costs incurred up until the goods are placed on board the international carrier for export. Free on board values exclude international insurance and transport costs. They include the value of the outside packaging in which the product is wrapped, but do not include the value of the international freight containers used for transporting the goods.Source: Minerals Council of Tasmanian Ltd Survey 2003.

Mineral royalties are the payment to the community for the purchase of the State's non-renewable resources. In Tasmania a sales and profit-based royalty applies to metallic and coal mines, while a production-based royalty is payable on non-metallic materials. The metallic and coal royalty consists of an ad valorem (value-based) royalty in terms of a percentage payable on net sales, and a formula-based percentage of profits.Mineral royalties of $9.0m were paid in 2003-04, compared with $4.5m in 2002-03. During 2002-03 royalties were low as two major mines experienced serious cash flow difficulties and were unable to pay royalties. During 2003-04 royalty revenues increased due to improving commodity prices and better operating conditions at the mines (Source: Mineral Resources Tasmania, Annual Review 2003-04).